European Stocks Drop as Dow Erases Early Gains

South Korean cameramen take a picture of an electronic stock board at the Korea Stock Exchange Market in Seoul, South Korea, Friday, Nov. 21, 2008.The Korea Composite Stock Price Index jumped 55.04 points, or 5.8 percent, to close 1,003.73.

(Ahn Young-joon/AP Photo)

European markets fell further Friday as early gains on Wall Street were wiped out amid mounting fears about the U.S. economy and the future of banking giant Citigroup Inc. in particular. Asian stocks closed mostly higher earlier in the day.

Despite opening some 150 points higher following Thursday's 445 point slide, the Dow Jones industrial average was up only 16.09 points, or 0.2 percent at 7,568.38. Meanwhile, the broader Standard & Poor's 500 index was 10.06 points, or 1.3 percent, higher at 762.50, having ended Thursday at 752, its lowest close since April 1997.

European stocks, which had not suffered as much as their U.S. counterparts on Thursday, tumbled on the renewed selling on Wall Street, with the FTSE 100 index of leading British shares closing down 94.03 points, or 2.4 percent, at 3,780.96. Germany's DAX was down 92.79 points, or 2.2 percent, at 4,127.41 while the CAC-40 in France was down 99.16 points, or 3.3 percent, at 2,881.26.

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Earlier, Asian markets recouped early losses in the wake of Thursday's sell-off on Wall Street to end up in positive territory. Japan's Nikkei 225 stock average rose 207.75, or 2.7 percent, to 7,910.79, and Hong Kong's Hang Seng index jumped 2.9 percent to 12,659.20.

Despite the earlier Asian gains, stock markets are generally on a renewed downtrend, ending the week sharply lower than where they started.

"Concerns of a more severe recession than expected, the return of deflation fears and the lack of new effective initiatives taken by policymakers are pushing investors to sell higher-risk assets," said Calyon analyst Herve Goulletquer.

This week's jitters were stoked primarily by concerns about the futures of Citigroup Inc. and the U.S. car industry.

Citigroup's future remains up in the air despite a report that said the banking giant was considering a sale to rebuild investor confidence.

The New York-based bank is scheduled to hold a board meeting Friday to discuss whether to sell all or part of itself, The Wall Street Journal reported.